electricity prices effective from 1 April 2025

Pricing Disclosure pursuant to Electricity Distribution Information Disclosure Amendment Determination 2024.

Every year, we review our electricity line charges to ensure they align with the costs involved in delivering electricity to our consumers. Any price changes not only include those associated with electricity distribution across our network, but also the costs charged to Vector by Transpower for delivering electricity across Transpower's national grid to Vector’s network.

We’re required to set our prices to comply with Commerce Commission (Commission) regulations which include the Electricity Distribution Services Default Price-Quality Path (DPP) Determination 2025. The Commission resets the DPP periodically, with 1 April 2025 marking the start of the fourth 5-year DPP (DPP4).  For the year commencing 1 April 2025 the Commission sets the forecast net allowable revenue a distributor can earn.  On top of forecast net allowable revenue, the DPP allows prices to also change to reflect pass-through costs (e.g. Transpower transmission charges, council rates and statutory levies) and recoverable costs (e.g. IRIS, wash-up drawdown amount and quality incentive allowance). 

Generally, we bill our ICP¹  based line charges and grid exit point (GXP) based transmission charges to electricity retailers. Electricity retailers then bill you these charges. Your electricity retailer will determine the basis on which the charges are passed through to you.

¹ ICPs are points of supply connection between the local network and consumers.
 

Price change

From 1 April 2025, our ICP based line charge prices (i.e. excluding transmission charges) are increasing by a weighted average of 21%. This increase can be largely explained by the increase in allowable revenue when we transition from DPP3 (covering pricing years 1 April 2020 to 31 March 2025) to DPP4.  Interest rates, a key input used by the Commission to determine the allowable revenue, are much higher now than they were when the Commission last set revenues for DPP3 in 2019.  To lessen the bill impact, the Commission has limited the initial increase at 1 April 2025.

Our transmission charges are bulk charged at a GXP level to electricity retailers. This is a direct pass through of Transpower charges to Vector. Please refer to Transpower’s explanation of their charges here. 

Your electricity retailer will determine how they pass our line charges and Transpower costs through to you. 

For further information on our price change, please refer to our pricing methodology, see www.vector.co.nz/about-us/regulatory/disclosures-electricity/pricing-methodology. 

Pricing structure changes

Vector’s price structure changes effective 1 April 2025:

·   Residential ICPs

      o   Low usage residential ICPs fixed daily line charge adjusted to reflect amended regulations,

·  For approved commercial ICPs

      o   Introduction of new distributed energy resources (DER) price categories for approved consumers.

· Introduce an annual wash-up calculation for our transmission pricing. 

For further information on our pricing methodology used to set prices, see www.vector.co.nz/about-us/regulatory/disclosures-electricity/pricing-methodology.

For further description of our line charges and how they are applied,  see https://www.vector.co.nz/personal/electricity/about-our-network/pricing or www.vector.co.nz/business/electricity/about-our-network/pricing.

The following tables are a summary of Vector's Northern and Auckland electricity network line charges. All prices are exclusive of GST.
 

The transmission charges are passed through in bulk to the retailers and direct billed ICPs as a fixed monthly amount based on their share of the historic GXP volumes (year to September 2024) in the table above. From 1 April 2025, we will also compare the historic volume share to the actual volume share (due to changes in ICPs and/or volumes through ICPs) and notify a final wash-up amount after the pricing year has finished.
 
Retailers determine how these transmission line charges are passed on to the consumer and retailers will be able to identify which GXP the consumer’s ICP is connected to. Note that the use of volume to allocate transmission costs, leads to an implicit $ per historic kWh at each GXP.